Correlation Between Macronix International and Trade Van
Can any of the company-specific risk be diversified away by investing in both Macronix International and Trade Van at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Macronix International and Trade Van into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macronix International Co and Trade Van Information Services, you can compare the effects of market volatilities on Macronix International and Trade Van and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Macronix International with a short position of Trade Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and Trade Van.
Diversification Opportunities for Macronix International and Trade Van
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macronix and Trade is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van Information and Macronix International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Macronix International Co are associated (or correlated) with Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of Macronix International i.e., Macronix International and Trade Van go up and down completely randomly.
Pair Corralation between Macronix International and Trade Van
Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the Trade Van. In addition to that, Macronix International is 1.91 times more volatile than Trade Van Information Services. It trades about -0.24 of its total potential returns per unit of risk. Trade Van Information Services is currently generating about 0.13 per unit of volatility. If you would invest 7,810 in Trade Van Information Services on August 31, 2024 and sell it today you would earn a total of 270.00 from holding Trade Van Information Services or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macronix International Co vs. Trade Van Information Services
Performance |
| Timeline |
| Macronix International |
| Trade Van Information |
Macronix International and Trade Van Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macronix International and Trade Van
The main advantage of trading using opposite Macronix International and Trade Van positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macronix International position performs unexpectedly, Trade Van can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Trade Van will offset losses from the drop in Trade Van's long position.| Macronix International vs. United Microelectronics | Macronix International vs. Winbond Electronics Corp |
| Trade Van vs. United Microelectronics | Trade Van vs. Winbond Electronics Corp | Trade Van vs. Macronix International Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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